Digital Railroad Servers To Be Scrubbed Clean
NEW YORK, NY (November 11, 2008) – Diablo Management has informed Digital Railroad's former customers and clients that the failed company's servers are now going to wiped clean and sold at auction immediately.
"Without a commitment for the purchase of its assets, DRR's senior creditor will move to take physical possession of the hardware on which the intellectual property of DRR and the copyrighted images of its customers and partners reside. The creditor will have all the information erased from the storage devices and then sell the equipment at auction," Diablo posted in an announcement on its Web site.
"Digital Railroad had hoped that it could preserve the images on the storage devices so that the owners of these images could recover them. Unfortunately, this was not achievable. We apologize for the difficulties that this has created but without additional resources we have no other recourse."
Diablo said that in the case of images in DRR's Marketplace that have been downloaded or used for which the publisher has not yet made payment, Diablo will work with the assistance of "photographers associations" to have the publishers pay the photographers directly.
The move comes after Newscom's managing director Bill Creighton withdrew their Letter of Intent to purchase and operate some of DRR's specific assets, and after a second company ended its negotiations with Diablo last Friday about maybe buying some of the assets.
Creighton told News Photographer magazine yesterday that Newscom dropped out of considering taking over some of DRR's servers and hardware and moving some of their operations into Newscom's data centers after their review of the technology and financials proved the idea to be too difficult and too costly.
"A lot of it was very good, but there were also gaping holes that needed to be fixed," Creighton said.
"We looked at what it would take to run it on a daily basis, and it was going tot need a lot of hand-holding, more than we expected. There also weren't very many of the original Digital Railroad customers left. And the cost of offering the service, so that it would be profitable, was going to be more than the average photographer would probably be interested in spending at this point."
Creighton said some of Digital Railroad's prices for photographer customers, some as low as $600, were too low to sustain or to be profitable for Newscom.
When Digital Railroad started to go south and warned customers to get their archives off the servers as quickly as possible, the Stock Artist Alliance tried to work with Diablo Management to preserve the photographers' archives and intellectual property on DRR's servers with the hopes of a gradual recovery effort for the data. But when Digital Railroad ran out of cash, and bank holding the note on the hardware foreclosed and the process of pulling the plug and going dark began.
Diablo Management is a company that specializes in liquidating and selling off parts of failing companies in an effort to recover any assets for investors. In Digital Railroad's case, the investors included the board of directors who resigned as the company failed, and both the COO and the company's president quit, leaving Diablo facing the cost of keeping servers alive with no one footing the bill.
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